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Total transparency of companies due to electronic accounting return

Publicado en Lunes, 25 Agosto 2014

Published in Monday, August 25, 2014

One of the new obligations in fiscal matter for companies and some individuals which has created annoyance in general is that they all must return, every month, their accounting to fiscal authority (SAT). Such new obligation has been received with distrust, mainly because of two effects: a) due to the inherent costs at the acquisition of the software that meets the requirements of forwarding, which to this date there is no such software which fully meets these requirements available at the market, and b) that to some companies this obligation pairs up with endangering the secrecy of their information.

We are aware of a large number of companies, regardless of volume of operations, have filed for Legal Protection in order to avoid having to meet this new obligation, however we see little possibility of success, for the purpose of federal authority is to put in locks to the evasion through the “cross-reference” of information shown in the accounting ledgers of each of the taxpayers.

If already companies had to meet multiple obligations such as filing monthly and annual tax returns, forward invoices electronically at the moment of their issuance, get electronic invoices from their suppliers, now it becomes transcendental to be current at documentation and accounting, for as said hereinabove each month they shall have to forward their accounting to SAT.

What information is to be forwarded?

First we must mention that the authority has requested that all taxpayers adequate their accounting systems, in order to adjust the structure of their “accounts” (name with which they designate their assets, liabilities, income, expenses); such structure is compulsory to all types of companies, regardless of the type of business at hand; furthermore, SAT has also requested that at each one of the accounting entries additional information is noted such as the suppliers’ RFC (Taxpayer Registration Number), type of currency used, exchange rate, among other requirements; it furthermore becomes totally compulsory that all of the records are made in Spanish or else attach the translation of the same.

In order to have a full image of what has to be forwarded, we following enlist the information included in the “accounting package”:

Catalogue of accounting accounts.- Name of each one of the accounts used at accounting, arranged as per its obligation structure.

Trial balance.- List of all of the accounts that include starting balances, total amount of the movements (transactions) per each account and final balance.

Analytic accounting ledgers of each one of the transactions performed during the month, this is purchases, sales, collections and payments.

Now here, it is appropriate to emphasize that the compulsory structure of accounts include special sections requested inasmuch as IVA (Added Value Tax) which purpose may be to identify the existence of omitted taxes.

As of when shall the filing of electronic accounting commence?

This obligation is already in force but its application shall be per stages; the companies must forward in the month of October of this year their catalogue of accounts, within XML file, afterwards they must forward their catalogue in a monthly basis in case there was any change in it.

According to a recently published extension, the second stage shall be the forwarding of the monthly trial balance sheet for the period of July to December of 2014, which must be forwarded the latest in January 2015; however it seems that such extension is really meant for the software suppliers to be able to finish doing the changes to their systems. Finally, regarding the accounting records, these must be provided (electronically forwarded) when the authority makes an audit to the taxpayer and/or it applies for a reimbursement or compensation of taxes.

In view of this panorama, this firm is carrying out necessary modifications to its electronic systems and internal procedures, however one of the critical items we have analyzed is that most likely the times of delivery-reception of information shall have to be shorter, thus very soon we shall inform you of the appropriate adjustments to the policy of delivery of information and documentation to talk them over in due time with your staff.

It is worth to highlight that legislation is not totally clear at some points and that it has been changing/reforming recurrently this year, thus we are permanently monitoring any new adjustment to fiscal regulations in order to keep you duly posted.

On a final note, we only would like to mention that this new obligation demands structural changes to the systems and procedures of each one of the companies in addition to a likely disbursement of funds; we furthermore note that authority has again made it clear wanting to obtain fiscal control through self-auditing of each one of the companies and of their suppliers; we hope these measures have no negative repercussion in view of the lack of a real simplification that promotes business growth.

We remain at your service should you need additional clarification regarding the items addressed in this article.

"That article may be contrary to the interpretation of the tax authorities"